scholarly journals Marginal Analysis as the Basis for Decision Making

2021 ◽  
pp. 46-50
Author(s):  
Thomas Jere

Margin analysis is a very powerful tool for modelling how individual producers and consumers make decisions. The basic idea is that decision makers make choices based on the comparative costs and benefits associated with small changes in a given state of the world. If the marginal benefits of a small change outweigh the marginal costs of that change, the decision maker makes that small change and then re-analyses for the next potential additional change. Margin analysis is an important component in modelling how producers make decisions to maximize profits and how consumers make decisions to maximize utility. The purpose of this study is to evaluate the different aspects of marginal analysis and how it may be applied in management accounting, therefore it encompasses a lot of aspects from how to evaluate actual opportunity costs to profit maximization and how these aspects can be applied in decision making, consequently this research will try to determine and infer whether the concept can be reliably applied in real life scenarios and be able to produce reliable results which can benefit firms to reduce costs and maximize their profits.

Author(s):  
Rami Benbenishty ◽  
John D. Fluke

This chapter presents the basic concepts, theoretical perspectives, and areas of scholarship that bear on decisions in child welfare—making choices in decision environments characterized by high levels of uncertainty. The authors distinguish between normative models that predict what decision-makers ought to choose when faced with alternatives and descriptive models that describe how they tend to make these choices in real life. The chapter reviews those challenges that may be especially relevant in the complex context of child welfare and protection. One way in which decision-makers overcome task complexities and limitations in human information processing (bounded rationality) is by using heuristics to navigate complex tasks. The chapter reviews strategies to correct some limitations in judgment. The authors examine the relationships between workers’ predictions of what would be the outcomes of the case and the actual outcomes and describe two types of error (false positive and false negative) and the related concepts of specificity and sensitivity. These issues are followed by a description of the Lens Model and some of its implications for child welfare decision-making, including predictive risk modeling and studies on information processing models. The final section presents current theoretical models in child welfare decision-making and describes Decision-Making Ecology (DME) and Judgments and Decision Processes in Context (JUDPiC). The chapter concludes with suggestions for future research on child welfare decision-making that could contribute to our conceptual understanding and have practical utility as well.


2015 ◽  
Vol 7 (1) ◽  
pp. 15-30 ◽  
Author(s):  
Ksenija Mandić ◽  
Boris Delibašić ◽  
Dragan Radojević

The supplier selection process attracted a lot of attention in the business management literature. This process takes into consideration several quantitative and qualitative variables and is usually modeled as a multi-attribute decision making (MADM) problem. A recognized shortcoming in the literature of classical MADM methods is that they don't permit the identification of interdependencies among attributes. Therefore, the aim of this study is to propose a model for selecting suppliers of telecommunications equipment that includes the interaction between attributes. This interaction can model the hidden knowledge needed for efficient decision-making. To model interdependencies among attributes the authors use a recently proposed consistent fuzzy logic, i.e. interpolative Boolean algebra (IBA). For alternatives ranking they use the classical MADM method TOPSIS. The proposed model was evaluated on a real-life application. The conclusion is that decision makers were able to integrate their reasoning into the MADM model using interpolative Boolean algebra.


Mathematics ◽  
2019 ◽  
Vol 7 (3) ◽  
pp. 242 ◽  
Author(s):  
Juan Aguarón ◽  
María Teresa Escobar ◽  
José Moreno-Jiménez ◽  
Alberto Turón

The Precise consistency consensus matrix (PCCM) is a consensus matrix for AHP-group decision making in which the value of each entry belongs, simultaneously, to all the individual consistency stability intervals. This new consensus matrix has shown significantly better behaviour with regards to consistency than other group consensus matrices, but it is slightly worse in terms of compatibility, understood as the discrepancy between the individual positions and the collective position that synthesises them. This paper includes an iterative algorithm for improving the compatibility of the PCCM. The sequence followed to modify the judgments of the PCCM is given by the entries that most contribute to the overall compatibility of the group. The procedure is illustrated by means of its application to a real-life situation (a local context) with three decision makers and four alternatives. The paper also offers, for the first time in the scientific literature, a detailed explanation of the process followed to solve the optimisation problem proposed for the consideration of different weights for the decision makers in the calculation of the PCCM.


2020 ◽  
Vol 2020 ◽  
pp. 1-12 ◽  
Author(s):  
Xue-Feng Ding ◽  
Li-Xia Zhu ◽  
Mei-Shun Lu ◽  
Qi Wang ◽  
Yi-Qi Feng

After an unconventional emergency event occurs, a reasonable and effective emergency decision should be made within a short time period. In the emergency decision making process, decision makers’ opinions are often uncertain and imprecise, and determining the optimal solution to respond to an emergency event is a complex group decision making problem. In this study, a novel large group emergency decision making method, called the linguistic Z-QUALIFLEX method, is developed by extending the QUALIFLEX method using linguistic Z-numbers. The evaluations of decision makers on the alternative solutions are first expressed as linguistic Z-numbers, and the group decision matrix is then constructed by aggregating the evaluations of all subgroups. The QUALIFLEX method is used to rank the alternative solutions for the unconventional emergency event. Besides, a real-life example of emergency decision making is presented, and a comparison with existing methods is performed to validate the effectiveness and practicability of the proposed method. The results show that the proposed linguistic Z-QUALIFLEX can accurately express the evaluations of the decision makers and obtain a more reasonable ranking result of solutions for emergency decision making.


2020 ◽  
Vol 11 (2) ◽  
pp. 270-281
Author(s):  
Jan Klabbers

This article addresses the ecology and functioning of the World Health Organization in a time of crisis, zooming in on the pressures on both the organization and its leadership generated by the circumstance that the organization cannot avoid allocating costs and benefits when taking decisions. The article argues that the covid-19 crisis illustrates how international organizations generally and the who in particular are subjected to conflicting demands, and how this impacts on the role of decision-makers. The latter, it transpires, need to display considerable practical wisdom.


2018 ◽  
Vol 8 (1) ◽  
Author(s):  
Anubha Taneja Mukherjee

Decision making is an inherently complicated procedure, which by its very nature requires the decision-maker to co-opt all the stakeholders concerned. The procedure of decision-making may vary from country to country, depending on its size, culture, history and special demographic circumstances. Around the world, key decision-makers include the executive, the legislature and the judiciary. While the distribution of powers between these three may vary in tandem with their relation to each other, their roles remain the same. While the legislature enacts laws for its citizens, the executive, popularly known as the government, implements these laws and while doing so promulgates policies that are in alignment with the said laws. Mostly, the executive is also authorised to promulgate some laws of its own. The judiciary, on the other hand, comes into the picture when there is a dispute with regard to such laws. It also steps in on its own at times. While settling such disputes, the judiciary also ends up setting what we know as precedents, which also become a part of the legal fabric of a society. In a nutshell, these three are the key decision makers in any country. As mentioned above, while making decisions, these authorities are mostly required to co-opt all the stakeholders concerned, thereby making decision making a consultative process. These stakeholders include think tanks, research bodies, media and most importantly the affected party. The reason for having such a consultative procedure in place is that the decision makers are not experts in every subject or issue that comes their way. For instance, when a need to promulgate a national policy on thalassemia presents itself to a certain government, whether it be owing to media reportage or representations from the civil society, the decision makers will look towards people considered to be the experts in the subject to come forward and be a part of the policy making. One could say that this sounds like an ideal situation where the government actually invites people concerned with thalassemia to come forward and share views about it for the purpose of policy making. It is, however, true! It is as true for India as it is for any developed country. What we must ensure then is that the government or the decision maker considers us, the patients, as the experts. While it does sound obvious that those impacted with the disorder would be the ones with the first-hand knowledge about the disorder, the very fact that there is a topic in this conference on the role of patients in decision making speaks volumes about the distance that remains to be covered by the patients of thalassemia as far as participation in decision-making is concerned. With the massive strides in the field of medical science and the unflinching support of organisations like Thalassemia International Federation (TIF), we have now reached the stage where we must step out of the victim mode and represent ourselves before the decision-makers, whether by forming Patients Advocacy Groups or otherwise. One may take cue from various associations around the world. Global HD Organisations are a good example. They are known to have got together to give patients a voice in clinical research. The most popular strategy for reaching out to the decision makers is to unite, engage, and partner both in private meetings and consultative fora like events, task forces and projects. “Unite, Engage & Partner” can therefore be the most successful mantra for engaging with the decision makers. Talking of examples of advocacy and participation by patients, while there are numerous examples in Europe and North America of the power of patient advocacy so much so that patients are on the same level as doctors when it comes to voicing opinions in policy making, TIF on an international level has created since 2009 the Expert Patients Programme, and is now moving forward in giving patients a voice through its educational platform. Recently, India also launched its first Thalassemia Patients Advocacy Group (PAG) in the august presence of the Deputy Chief Minister of the capital of the country. The India PAG has seven patients from the fields of law, psychology, education and IT. The Group is already involved with the government on the formulation of the National Thalassemia Policy. This is a great start and this should give enough and more encouragement to thalassemics across the world to UNITE, ENGAGE AND PARTNER in the process that impacts them the most – decision-making!


Author(s):  
Srikant Gupta ◽  
Ahteshamul Haq ◽  
Irfan Ali ◽  
Biswajit Sarkar

AbstractDetermining the methods for fulfilling the continuously increasing customer expectations and maintaining competitiveness in the market while limiting controllable expenses is challenging. Our study thus identifies inefficiencies in the supply chain network (SCN). The initial goal is to obtain the best allocation order for products from various sources with different destinations in an optimal manner. This study considers two types of decision-makers (DMs) operating at two separate groups of SCN, that is, a bi-level decision-making process. The first-level DM moves first and determines the amounts of the quantity transported to distributors, and the second-level DM then rationally chooses their amounts. First-level decision-makers (FLDMs) aimed at minimizing the total costs of transportation, while second-level decision-makers (SLDM) attempt to simultaneously minimize the total delivery time of the SCN and balance the allocation order between various sources and destinations. This investigation implements fuzzy goal programming (FGP) to solve the multi-objective of SCN in an intuitionistic fuzzy environment. The FGP concept was used to define the fuzzy goals, build linear and nonlinear membership functions, and achieve the compromise solution. A real-life case study was used to illustrate the proposed work. The obtained result shows the optimal quantities transported from the various sources to the various destinations that could enable managers to detect the optimum quantity of the product when hierarchical decision-making involving two levels. A case study then illustrates the application of the proposed work.


2012 ◽  
Vol 7 (2) ◽  
pp. 196-212 ◽  
Author(s):  
Roger A. Pielke

This essay explores the management and creation of ignorance via an exploration of the landscape of eastern Germany, which has seen profound social, political, and technological changes over the past several decades. Like in many places around the world decision makers in eastern Germany are seeking to reach a future state where seemingly conflicting outcomes related to the economy and the environment are simultaneously realized. The management of ignorance is an important but often overlooked consideration in decision making that the concept of "post-normal science" places into our focus of attention.


2019 ◽  
Vol 2019 ◽  
pp. 1-12 ◽  
Author(s):  
M. Sarwar Sindhu ◽  
Tabasam Rashid ◽  
Agha Kashif ◽  
Juan Luis García Guirao

Probabilistic interval-valued hesitant fuzzy sets (PIVHFSs) are an extension of interval-valued hesitant fuzzy sets (IVHFSs) in which each hesitant interval value is considered along with its occurrence probability. These assigned probabilities give more details about the level of agreeness or disagreeness. PIVHFSs describe the belonging degrees in the form of interval along with probabilities and thereby provide more information and can help the decision makers (DMs) to obtain precise, rational, and consistent decision consequences than IVHFSs, as the correspondence of unpredictability and inaccuracy broadly presents in real life problems due to which experts are confused to assign the weights to the criteria. In order to cope with this problem, we construct the linear programming (LP) methodology to find the exact values of the weights for the criteria. Furthermore these weights are employed in the aggregation operators of PIVHFSs recently developed. Finally, the LP methodology and the actions are then applied on a certain multiple criteria decision making (MCDM) problem and a comparative analysis is given at the end.


2018 ◽  
Vol 3 (1) ◽  
pp. 1-12
Author(s):  
Thais Spiegel ◽  
Ana Carolina P V Silva

In the study of decision-making, the classical view of behavioral appropriateness or rationality was challenged by neuro and psychological reasons. The “bounded rationality” theory proposed that cognitive limitations lead decision-makers to construct simplified models for dealing with the world. Doctors' decisions, for example, are made under uncertain conditions, as without knowing precisely whether a diagnosis is correct or whether a treatment will actually cure a patient, and often under time constraints. Using cognitive heuristics are neither good nor bad per se, if applied in situations to which they have been adapted to be helpful. Therefore, this text contextualizes the human decision-making perspective to find descriptions that adhere more closely to the human decision-making process. Then, based on a literature review of cognition during decision-making, particularly in healthcare context, it addresses a model that identifies the roles of attention, categorization, memory, emotion, and their inter-relations, during the decision-making process.


Sign in / Sign up

Export Citation Format

Share Document